President Obama’s financial reform bill may have passed on July 15 with the support of three Republican senators, including newly elected Massachusetts Sen. Scott Brown, but the "Volcker rule" seems to have been a casualty.

As negotiations over financial reform legislation proceeded in Congress, a major point of contention emerged — the so-called Volcker rule, the New Yorker magazine reports in a feature story by writer John Cassidy.

Named for former Federal Reserve Chairman Paul Volcker, now an economics adviser to the Barack Obama administration, the Volcker rule restricted banks from engaging in risky investments like derivatives, private-equity funds, and hedge funds.

But by the time reform legislation was passed, provisions implementing the Volcker rule had been significantly watered down — thanks in part to the Obama administration’s softening of support.

The Volcker rule barred banks from speculating in the markets — proprietary trading — and from operating and investing in high-risk and highly illiquid investments.

Volcker believed the provisions would help restore the legal divide between commercial banks, which issue credit to households and companies, and investment banks, which issue and trade securities. That split had ended with legislation passed in 1999.

When President Obama in January spoke at the White House to urge Congress to enact reform — with Volcker at his side — he called for “a simple and common-sense reform, which we’re calling the Volcker rule,” Cassidy notes.

The financial industry lobbied to weaken the Volcker rule, and the Democratic leadership began to compromise to secure the vote of Sen. Brown, who sought changes to please large financial firms, some of which are based in Massachusetts.

One new provision allowed banks to invest up to 3 percent of their capital in hedge funds or private-equity funds.

Volcker expressed disappointment in the compromise, telling Cassidy: “We could have done better . . . I’m a little pained that it doesn’t have the purity I was searching for.”

The strict version of the Volcker rule was removed from reform legislation before it was passed by the Senate.

Some Democrats blamed Republicans who wanted to protect big banks. But Volcker “also suspected that some administration officials were willing to make too many concessions to Wall Street, including on the Volcker rule,” Cassidy wrote.

The administration was determined to see the legislation headed for passage before Obama attended a G-20 meeting in Toronto on the weekend of June 26. The House and Senate reached a final compromise on the bill on June 25.

“I think they had priorities that were a little different from mine,” Volcker told Cassidy afterward. “The president wanted a bill. He was going to Toronto. Everybody wanted a bill. It comes down to a squeeze play, and the 60th vote, or the person who’s perceived as the 60th vote, he’s got an awful lot of leverage.”

Explaining his opposition to the construction of a mosque near New York’s ground aero, former House Speaker Newt Gingrich “dramatically refocuses” understanding of the threat posed by radical Islamism.

That’s the view expressed by Andy McCarthy, author of the new book “The Grand Jihad: How Islam and the Left Sabotage America,” in an article for National Review Online.

The threat posed by Islamism “is not just about terrorism — that's just a small part of the offensive,” McCarthy writes, summarizing Gingrich’s assertions.

“We are confronted by a mainstream movement that seeks gradually to infuse sharia, Islam's legal and political framework, into our legal, political, financial, economic, and educational systems — and throughout our culture.”

In an essay for Human Events, Gingrich observes: “One of our biggest mistakes in the aftermath of 9/11 was naming our response to the attacks ‘the war on terror’ instead of accurately identifying radical Islamists (and the underlying ideology of radical Islamism) as the target of our campaign.

“Many Muslims see sharia as simply a reference point for their personal code of conduct. They recognize the distinction between their personal beliefs and the laws that govern all people of all faiths.

“For the radical Islamist, however, this distinction does not exist. Radical Islamists see politics and religion as inseparable in a way it is difficult for Americans to understand. Radical Islamists assert sharia’s supremacy over the freely legislated laws and values of the countries they live in and see it as their sacred duty to achieve this totalitarian supremacy in practice.

“Some radical Islamists use terrorism as a tactic to impose sharia but others use non-violent methods — a cultural, political, and legal jihad that seeks the same totalitarian goal even while claiming to repudiate violence. Thus, the term ‘war on terrorism’ is far too narrow a framework in which to think about the war in which we are engaged against the radical Islamists.”

Gingrich’s essay goes on to describe the troubling advance of the sharia agenda in the United States, and why a true understanding of the ultimate goals of Islamists should shape opposition to the proposed mosque in Manhattan.

Imam Feisal Abdul Rauf, the man behind the mosque proposal, “is an apologist for sharia supremacy,” Gingrich notes, and in a recent Op-Ed he actually compared sharia law with the Declaration of Independence.

“This isn’t mere dishonesty; it is an Orwellian attempt to cause moral confusion about the nature of radical Islamism,” Gingrich writes.

“We need to have the moral courage to denounce it. It is simply grotesque to erect a mosque at the site of the most visible and powerful symbol of the horrible consequences of radical Islamist ideology. Well-meaning Muslims, with common human sensitivity to the victims’ families, realize they have plenty of other places to gather and worship. But for radical Islamists, the mosque would become an icon of triumph, encouraging them in their challenge to our civilization.”

Democratic National Committee Executive Director Jennifer O'Malley Dillon says that among the field of potential Republican candidates for president in 2012, there is one who truly scares her: South Dakota Sen. John Thune.

Thune served in the U.S. House from 1997 to 2003 and ran against Sen. Tim Johnson in 2002, losing by just 524 votes. Then in 2004, he defeated powerful Senate Minority Leader Tom Daschle, becoming a Republican Party favorite as the first candidate to beat a sitting Senate leader in more than half a century.

"This is personal but John Thune is somebody that I have nightmares about," Dillon said during a July 23 panel discussion.

“I've worked for Tim Johnson and Tom Daschle and he is just a guy you can't ever count out. He has his head down and is doing some policy stuff. [You] just got to start looking at him."

The Insider Report first pointed to Thune’s strengths as a possible White House candidate in January, quoting Republican lobbyist Jeff Kimbell: “Thune’s message of focused fiscal restraint, coupled with aggressive small-business incentives to drive growth, will resonate extremely well with the GOP base and independents as well as Democrats.”

As a senator, Thune has been sharply critical of excessive spending by the Democrats.

The American Conservative Union gave him a perfect rating of 100 in 2006.

The Huffington Post observed: “It would be curious to see what the chatter of Thune as the dark horse of the Republican field does for both his standing within the party and his own internal deliberations about his political future.”

The upcoming publication of former President George W. Bush’s memoir has some Republicans concerned it could have a negative impact on GOP candidates in the midterm elections.

“Decision Points” is not scheduled for release until Nov. 9, a week after the elections, but details from the book have already leaked out and more are certain to follow.

Bush himself has disclosed that his book begins with an anecdote about his wife persuading him to give up drinking by pushing him to decide if he preferred alcohol to fatherhood. Bush said he realized at that point he had an addictive personality and quit drinking.

Matt Latimer, who was deputy director of speechwriting for Bush, wrote for The Daily Beast that some Republicans, “particularly those most closely tied to the Bush regime, actually argue the book could help the party by reminding some voters of what they liked about Bush. Still, that has not stopped some Republicans, traumatized over the last two election cycles, from fearing the worst. ‘Monumentally bad timing’ was the reaction of one former Bush aide who learned of the book release date.”

As Latimer pointed out, a recent Bloomberg poll found that more voters blamed the former president than the current one for the situation in Afghanistan, unemployment, and the federal deficit.

Bush has said he is not writing a traditional memoir but an account of key decisions in his life. According to Crown Publishers, "Decision Points" will offer "gripping, never-before-heard detail" on such historic events as the 9/11 attacks and the 2000 presidential election.

“Like the Bush team itself, there is nothing that the Obama administration would like more than to re-lasso the GOP to the Bush years and, the Obama White House hopes, remind the country of why they turned to the Democrats in the first place,” Latimer observes.

The Democratic Congressional Campaign Committee recently rolled out an Internet ad taking aim at Republicans over the Bush issue. The organization's message: “We can't afford to [go] back" to the Bush era.

Medicaid’s utilization rate of generic drugs is only around 64 percent, about 10 percent lower than for the general population, an analysis by the Generic Pharmaceutical Association (GPhA) found.

Every 2 percent increase in the substitution of generic drugs for brand-name medications reduces Medicaid drug spending by about $1 billion, the GPhA reported.

The potential for savings on drugs is enormous. For the decade 2000 through 2009, the use of generic prescription drugs in place of brand-name products saved the nation’s healthcare system more than $824 billion.

Last year alone, the use of FDA-approved generics saved $139 billion — a 15 percent increase over the prior year — or about $382 million every day.

The increase is largely due to several widely prescribed drugs coming off patent and being replaced by generic versions, including the antidepressants Zoloft and Zocor.

For Medicaid, achieving savings on drugs is increasingly important, The Wall Street Journal observed, because “participation in the federal-state program as well as state children’s health programs will expend” by anywhere from 16 million to 23 million, according to varying estimates.